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Las Vegas
Insights New arena sounds like an impossible dream bY IAN MYLCHREEST, BUSINESS PRESS, June 2006 A month ago the quest began to formulate a plan for a "world-class" stadium for Las Vegas. Let's leave aside for a minute the inflexible rule that any place seeking a "world-class" anything is usually suffering an inferiority complex about its status in the world. The venerable Thomas & Mack, which, remember, was only built in 1983, is now obsolete. "The House that Tarkanian Built," officials say, is past its prime after just 23 years. (Although, to be fair, one option still officially on the table at the task force is that T&M be given a major facelift.) And already the task force has done what government task forces do best -- decided to appoint a consultant to do the hard work. And at its first meeting last month, Mayor Oscar Goodman announced that he was working with two groups that wanted to bring National Hockey League teams to the valley. The teams, he says, are also planning to build their own arenas. Ian Mylchreest Click here for Office Furniture Concepts These so-called "parallel" negotiations really suggest that there are two or three different agendas within the task force and they are not so much parallel as moving in different directions. Some of the possibilities include: a) an events facility that would accommodate large concerts, fights, circuses and annual events like the National Finals Rodeo. b) a sports arena for a future NHL or NBA franchise. If it could also accommodate baseball or football, then it would be so much the better. c) a stadium that could also be adapted as an adjunct to the Convention Center for national sales meetings, rallies and revivals. d) all of the above. Of course, everyone says they want the private sector to build and operate the new venue. How is that going to happen? A major casino operator would have to become the main player and managing partner just as Sands and MGM Mirage operate convention centers, but that gets us right into the forbidden territory of Pete Rose and Janet Jones and all the rest of the rogues who liked a bet but became the target of league commissioners who feared that gambling would kill their golden geese. In fact, as long as Las Vegas has had wide-open gaming, sports leagues have tried to insist that their members steer clear of casinos. In 1947, Del Webb built the original Flamingo for Bugsy Siegel and retained a minority ownership interest. Commissioner Happy Chandler was scandalized and tried to force the part-owner of the Yankees to sell his interest in the resort. The NFL may be hypocritical but it, too, has been nothing if not consistent in its refusal to have anything to do with Nevada gaming. And NBA Commissioner David Stern has budged an inch or two with the 2007 All-Star Game coming to town, but no one expects that he'll decide we deserve a franchise any time soon. To get the casinos to be interested in owning a venue, though, it will have to be built on casino-owned land that will add value to a major resort. And, by definition, that will preclude any major sports franchise. And here's the Catch-22: The promise of a major team as the anchor tenant would be the real incentive to build the place. On the other hand, a casino company's wish to build an all-purpose shed it could use as much as 300 days a year would inevitably make the proposed venue much less attractive to a major sports franchise. Mayor Goodman has said already that the hockey teams he's talking to want to build their own facilities. We can probably guess that the planned arena will be built on land downtown, probably donated by the city. I'd even hazard a guess that it might be slated for Union Park. If any of that happened, it would leave a big hole in the potential calendar of any facility the task force endorses. Mind you, it's hard to conceive how we have a prayer of making a hockey franchise work. Of all four of the "big league" sports, hockey is the smallest. It's almost a niche interest and if it weren't based in Canada, where it's the national pastime, it would not be much of a league at all. It's also got to be at the bottom of the list of sports that would appeal to Las Vegans. Just because we can freeze an ice rink when it's 95 or 100 degrees outside doesn't mean that the sport is going to take off here. Look at the facts: The tickets are expensive. The Edmonton Oilers have just announced new prices for next year's season tickets. The best seats will be $5,680 per ticket or $139 per game for the regular 41-game season. Even a cheap seat will cost an Oiler fan $1,064 or $26.37 per game. And the Edmonton franchise has just caught up with most other teams that charged that much for season tickets this year. That's asking a lot of interested locals. And then there's the television revenue. The economics of all big sports depend on broadcast revenue. Football seems to have known this from the beginning and was blessed with a limited number of games. Basketball and baseball, of course, play many more games and so any single one has considerably less drawing power. But those leagues are now developing deals with local stations and regional cable networks to maximize their TV revenue. Hockey, at least in the United States, is the Cinderella. Quick ... who is televising the Stanley Cup playoffs? The Outdoor Life Network. Its last big gig was the Tour de France. At best, OLN has been a niche player in sports. � And unlike the other three major league sports, hockey's television revenues in the U.S. are minuscule. Poker makes more money than hockey here. So our franchise can't hope for too much revenue from its broadcast rights. At best, the economics of the NHL in Las Vegas seem precarious. And so the consultants will have to come up with ideas for a new venue that many tenants can use without casino participation or maybe even without an anchor sports franchise if the mayor's NHL teams play downtown. And none of it will cost the taxpayers a cent. If the consultants can do all that, they will have really earned their $200,000 fee. imylchreest@lvbusinesspress.com | 702-871-6780 x319 Links Blogs * http://www.travelmole.com/stories/1114044.php?mpnlog=1 * Los Angeles category:where